Reports of Amex shutting down accounts always creates a stir in the miles and points space. According to Doctor of Credit, there seems to be another wave of Amex shutdowns. So what’s really going on and should we be worried?
Amex Shutting Down Accounts: What’s the issue?
Doctor of Credit posted this screenshot about the notice of an account shutdown from Amex.
So what’s really going on? There’s a lot of noise on forums like Reddit about these shutdowns. These shutdowns seem to be stemming from a specific type of international spend. Now, in this case, these cases of Amex shutting down accounts stem from buyer groups based internationally.
My guess is that these international buying groups are running up massive spends and triggering Amex’s algorithm to issue an alert. So, it’s no surprise that Amex is going after these types of spends. Also, there’s a good chance that Amex is going after these people because they may be cycling credit limits.
My Take
I’ve been in this space for 14 years now. I’ve barely done any manufactured spend over the years and don’t advice others to do so if they ask me. In my opinion, the pie is large enough if you simply apply for cards, meet minimum spend and earn welcome bonuses to earn miles and points.
In my opinion, I just don’t see the risk-reward with manufactured spend worth it. When you can earn millions of miles and points by simply having a cogent credit card application strategy, why do other stuff that may put you in the ‘naughty’ list with a major credit card issuer?
The Pundit’s Mantra
Now, if you look at the Reddit comments there seems to be some confusion about what’s really causing the shutdowns.
There’s some confusion about whether simply spending money abroad is triggering the shutdowns by Amex. In my opinion, it has got to do more with the international buying groups and the volume of buying being done on those cards while being based outside the US.
As I’ve stated here on the blog multiple times, almost 90% of my travel is international in nature. This means that I spend a significant amount of time outside the US, which means that almost all of my spend is primarily international in nature. However, most of my spend is on things like groceries, dining and travel and I haven’t run into any issues with any of the major banks like Chase or American Express.
So, while Amex shutting down accounts gets many people speculating, one must still remember that in most cases, it only affects a very small minority of customers. If your spend is legit, whether international or domestic, then in most cases, you should be good to go.
What’s your take on the most recent wave of Amex shutdowns? Tell us in the comments section.
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More than a few in the cc/ff “game” want more and more and see nothing wrong with pushing or going beyond the limits. Then when they get caught they won’t share the full story.
Maybe once in a million or less, someone will get unfairly shut down but that is very rare.
Companies are in the business to make money and will put up with some stuff but when people constantly open a card and then shut it down after a year, well they aren’t the customers companies want. And those people are why you end up with one time bonus limits on cards.